Calibaja

Over the past year, EDC has partnered with the Brookings Institute’s Bilateral Cities Exchange to refine the economic development approach between Tijuana and San Diego. In parallel, EDC’s recent engagement with the site selection industry through Explore San Diego – a tour hosted for 12 site selector consultants earlier this year – enabled our facilitation of a cross-border business attraction project that will provide jobs and investment on both sides of the border. Per terms of confidentiality, this project is being referred to as Project Scout.

During EDC’s inaugural Explore San Diego tour, we focused not only on success stories in San Diego, but highlighted companies who had set up operations on both sides of the border, including Thermo Fisher and BD. Although we frequently hear about cross-border collaboration in San Diego, we soon realized that it was a story that many outside the region – including these site selectors – hadn’t thought about; companies can easily do business on both sides of the border.

In early March, EDC received a request from an Explore San Diego attendee whose client was looking to scale manufacturing operations outside of its current high-cost pilot facility. Given the consultants’ recent exposure to the bi-national mega region, San Diego-Tijuana made the long list of 20 potential sites. In response, EDC provided data, real estate market figures and other strengths regarding our cross-border economy. Just two weeks later, a call came in that San Diego-Tijuana had made the top three, alongside North Carolina and Texas.

In a tour on behalf of Project Scout, EDC rallied the necessary business and political partners in order to put the region’s best foot forward – making the case for a cross-border operation. With partners including CaliBaja, city of San Diego, city of Tijuana, San Diego Mayor Faulconer, Tijuana EDC and UC San Diego, EDC showcased Tijuana’s dynamic manufacturing facilities. Here, the group shattered stereotypes by exposing not only the quality and efficiency of Tijuana manufacturing, but also the cross-border collaboration that makes our region so unique.

Project Scout ultimately chose to scale 80,000 square feet of manufacturing operations in San Diego-Tijuana – beating out North Carolina, Texas and other competitors. The local operation will provide jobs on both sides of the border beginning in August.

Earlier this week the San Diego Regional Chamber of Commerce and The Mexico Business Center hosted the North American Competitiveness and Innovation Conference (NACIC). The conference focused on cross border trade and business opportunities between the U.S., Mexico and Canada.

One of the most popular panels focused on developing workforce talent and was moderated by EDC’s CEO Mark Cafferty. The panelists were Bill Bold, sr. vice president of QUALCOMM, Lauren Friese, CEO and founder of TalentEgg from Ontario, Canada and Rafael Sostmann, professor of practice for education innovation and special advisor to the president of Arizona State University.

Mark opened the session by explaining that San Diego Regional EDC’s attraction efforts focus on corporate executives and talent, specifically young people just graduating from universities. He said competitiveness for North America is about talent and asked the panel: “How we develop the workforce of the future?”

Rafael, an engineer by training, is also the former president of Mexico’s largest private, nonprofit educational system, Tecnológico de Monterrey. He suggested that industry linkages with universities are critical. At ASU, student startups are supported through on campus incubators and on campus industrial parks leased to businesses.

Lauren explained that she started her company, an online tool that connects young talent with job opportunities, after she finished graduate school in London. She discovered that linkages between students and industries were much stronger in the United Kingdom than in Canada. Inspired by the tools she saw working in the UK, she replicated the networking platform through TalentEgg. She suggested that too often employers only want to hire young people with “the right” degree, when there are plenty of people who can be trained for just about any career.

Bill spoke about the investments and partnerships QUALCOMM has with students and universities to grow its future workforce. As a world leader in mobile communications and computing technologies, QUALCOMM licenses its innovations to smart phone manufacturers. QUALCOMM is also the world’s largest producer or semiconductors. Of its 31,000 employees worldwide, 81 percent have a degree in a STEM field. The mobile giant is dependent on international markets; While 92 percent of the company's revenues are earned outside the U.S 67 percent of its workforce is in San Diego because they care about hiring locally. Bill said Qualcomm is intense about recruiting – pursuing only the top one percent of graduates from the top five percent of universities – likening it to college football recruiting. Last year Qualcomm had 1,100 paid interns, of whom 300 got offered full time jobs, and 250 accepted. The company recently invested $20 million in a new engineering center at Berkeley to build a cutting-edge program blending art, architecture and engineering.

Responding to a question from the audience about the best ways to prepare young people for careers, the panel pointed to the German apprentice-style model. Germany’s vocational education system pairs classroom studies with on-the-job learning. Students apply for a specific apprenticeship at a company. For two to three years they spend a few days a week at a work site, getting paid a stipend from their employer, and one to two days a week in a classroom learning theory. They graduate with a certificate that signifies they know all the basics to begin working professionally in their fields. Not only are the certificates standardized throughout Germany, but they are also well-respected and often a necessary requirement for jobs. Companies like Siemens have brought the work experience aspects of the program to the U.S. offering students here similar opportunities.

If San Diego wants to maintain its share of talent, it would be in our best interest to explore similar programs.

On the border of San Diego and Tijuana sits San Ysidro, the busiest land port of entry in the world. Every day, an astounding 50,000 vehicles and 25,000 pedestrians wait in line to enter the U.S. One in eight people who cross into the country daily will do so via the San Ysidro Port of Entry. And that’s only one of California’s six ports of entry.

The border provides enormous economic opportunities for the region, but wait times are impeding our ability to harness this potential. Current infrastructure needs must be addressed. According to the San Diego Metropolitan Export Initiative: Market Assessment, San Ysidro is an “infrastructural bottleneck,” with many respondents citing difficulties with border crossing as a barrier to doing business in Mexico. Even with the recent expansion of several border crossings, today’s average wait time sits at 70 minutes, translating into more than eight million trips lost due to congestion each year. In fact, more jobs are lost in San Diego every year to border congestion than the government’s recent budget sequestration.*

A new bill is trying to speed up border wait times. SB 397, sponsored by Sen. Ben Hueso (D- San Diego), calls for the creation of an Enhanced Driver’s License (EDL), which will permit carriers to use “Ready Lanes.” The technology in these new driver licenses, which will be issued by California’s DMV—eliminates the need to manually key –in travelers information, translating into a 60 percent faster processing time.

Several Canadian border states have successfully implemented EDLs and Arizona and Texas are working on instituting similar programs for our neighbors to the south.

Although SB 397 is only a small part of a long string of reforms that are needed to expedite border crossing, it’s a step in the right direction. The San Diego region cannot afford to lose out on the $1.3 billion in revenue and $ 42 million in wages that dissipate due to border congestion every year. The border is one of the most unique aspects about the region. Companies including 3Drobotics and Aqualung don’t shy away from the fact that this is one of the reasons they are proud to call San Diego home. Through work with the CaliBaja Bi-National Mega-Region, EDC understands the fundamental necessity of teaming with Baja California, Mexico and Imperial County to the East.

Bottom line: the border means big business for the mega region. SB 397 is one step in helping us maximize our cross-border potential.

*Projected impact of sequestration was 10 percent of military personal across board in San Diego; Recent SDMAC report found that the military had 311,000 direct employees in the region, SDMAC Military Impact Report 2012